Hawaiian Telcom boosts fiber, posts loss ahead of sale

Hawaiian Telcom continued to invest in its fiber infrastructure in the first quarter but posted another loss while gearing up for the completion of its sale to Cincinnati Bell.

The state’s largest technology and telecommunications company, which on April 30 received approval on the sale from the Hawaii Public Utilities Commission, now only needs a green light from the Federal Communications Commission for the $650 million cash-and-stock deal to be finalized with Cincinnati Bell.

Hawaiian Telcom was due to report just after midnight today that it lost money for the seventh straight quarter partly due to a $2.1 million year-over-year increase in depreciation and amortization from its continued investments to expand its fiber network statewide. The company posted a loss of $5.7 million, or 49 cents a share, compared with a loss of $2 million, or 17 cents a share, in the year-earlier period.

“Our fiber investments and state-of-the-art network has helped us transform our company and will position us to capitalize on customers’ growing demand for higher bandwidth and integrated solutions,” Hawaiian Telcom President and CEO Scott Barber said in a statement.

Fiber-optic cable, basically thin strands of glass, has the ability to transfer more data over longer distances than copper, which traditionally has been used.

Hawaiian Telcom said about 1,700 business addresses and 1,000 consumer households were connected with fiber during the first quarter. That brings the total on Oahu to 13,000 businesses with access to fiber and 207,000 households.

Separately, Cincinnati Bell President and CEO Leigh Fox said in his company’s earnings conference call on Wednesday that the acquisition is expected to close in the early second half of this year.

“The pending merger with Hawaiian Telcom is an extension of our fiber strategy and represents an opportunity to replicate our success in Cincinnati in another attractive market that has already begun progress on a ‘Fiber to the Premise’ strategy (fiber goes directly to the home or business) in Oahu,” Fox said.

Hawaiian Telcom reported that its revenue fell 5.6 percent in the first quarter to $89.2 million from $94.5 million, partly due to declines in landlines and low-bandwidth copper internet services.

However, the company said TV revenue rose 6 percent on the strength of 7 percent subscriber growth, consumer internet revenue rose 6.3 percent, business VoIP revenue jumped 23.3 percent and revenue for its wholesale high-bandwidth services (which are provided to other carriers) gained 57 percent.

Hawaiian Telcom’s stock rose 75 cents, or 2.7 percent, to $29.03 on Wednesday.